December 8th, 2009, Fairfax, VA—Americans for Limited Government President Bill Wilson today urged members of Congress to reject Barack Obama’s plan to bail out state governments with taxpayer funds paid back by banks through the Troubled Asset Relief Program (TARP), saying “taxpayers won’t recover one cent of TARP if Congress goes along with Obama’s bailout of public sector unions.”

“Instead of using repaid TARP funds to bail out the public sector unions in bankrupt states like California and New York, it should be used to pay down the $12 trillion national debt,” Wilson said.

“Congress must reject the $200 billion states bailout, before TARP is allowed to become a political slush fund — a revolving line of credit for the big spenders in Washington to waste on whatever they want in state capitals across the country,” Wilson said.

While Obama, in his Allentown visit, made it a point to stage events at privately owned factories, top Administration revealed that in a speech scheduled for Tuesday, he intends to introduce a new federal “stimulus” package, which, according to AP will call for “sending the biggest chunk of fresh money to cash-strapped state and local governments.”

“One of the primary reasons state and local governments are ‘cash strapped,’” said Wilson, “is that they have allowed rapid increases in the number of government workers. The last thing the American people need is for bloated state and local governments to get a federal infusion of tax dollars to take on more overpaid, underworked government employees.”

Speaking on December 3rd in Washington, Obama announced the plan: “Next year we’re going to still have some of those challenges because usually state and local government revenues lag the recovery as a whole. They may need some more help from the federal government.”

Obama said it was up to the federal government to pay state bills. “Frankly, because state and local governments generally don’t have the capacity to engage in deficit spending, some of that obligation falls on the federal government.”

Wilson said that “balancing state budgets and bailing out public sector unions is becoming a permanent line on the federal budget,” reminding American news media that the $789 billion “stimulus” bill contained $53.6 billion to bail out state and local governments.

Wilson noted that “a lot of that spending has not even gone into effect yet, and the states are already lined up to bail out their 2010 deficit-spending needs. States like California and New York cannot sell enough bonds to keep up with the excesses of the boom years. If Congress bails them out, it will mean they will not have to make painful, necessary cuts in spending.”

“The worst medicine for profligate spenders in state governments nationwide is for the federal government to issue them blank checks to bail out their public union political constituencies,” Wilson said. “It is obscene for a bankrupt federal government to shell out hardworking taxpayers’ dollars to bail out wasteful state and local governments so that they can in turn hire a whole new army of overpaid, make-work bureaucrats.”

“The way to stimulate the economy and create new jobs, “Wilson added, “is to cut taxes, cut regulations, stop the government takeover of private industry, and allow the private sector to get back in its feet with real, product-producing jobs.

“More government bureaucrats — at any and every level — just means more waste, larger governments, and higher taxes on those few private sector employees left who are already bearing the burden of out-of-control government spending.”

Wilson pledged that his organization’s 400,000 members nationwide would “work at every level” to stop the new Obama spending program.

“Congress needs to stop wasteful government spending,” Wilson concluded, “and not allow the politicians to just shift its focus and disguise its intent. Bailing states out of their own irresponsible decisions is an irresponsible use of federal taxpayer resources.”